1 Company overview
Dynamatic Technologies Limited (the Company) was incorporated in 1973
as Dynamatic Hydraulics Limited under provisions of the Companies Act,
1956 (''the Act''). In 1992, the name of the Company was changed to
Dynamatic Technologies Limited. The Company is in the business of
manufacturing automotive components, hydraulics gear pumps, aerospace
components and wind farm power generation. The Company is listed in
India with National Stock Exchange and Bombay Stock Exchange.
Rights, preferences and restrictions attached to equity shares:
The Company has a single class of equity shares. Accordingly, all
equity shares rank equally with regard to dividends and share in the
company''s residual assets. The equity shares are entitled to receive
dividend as declared from time to time. The voting rights of an equity
shareholder on a poll (not on show of hands) are in proportion to its
share of the paid-up equity capital of the company. In the event of
liquidation of the Company, the holders of equity shares will be
entitled to receive any of the remaining asset of the Company after
distribution of all preferential amounts, if any. The distribution will
be in proportion to the number of equity shares held by the
* Secured by hypothecation of vehicle. The amount is payable in 36
monthly instalments from the date of purchase. The rate of interest for
the outstanding vehicle loan ranges from 9.75% p.a to 11.50% p.a.
** To promote the industries in backward area (i.e. @
Irrungattukkottai) Government of Tamil Nadu, announced a sales tax loan
facility. To avail the facility, the Company has entered into an
agreement with the Sales tax department for deferring payment of sales
tax collected during financial year 2001-02 to 2005-06. The deferred
amount will be repaid by 2014-15. The amount repayable in 2012-13 is
Rs.186 lacs and accordingly disclosed as current liability.
*** Deposits from shareholders carry interest rate in the range 10-11 %
and are repayable within 1- 3 years from respective date of deposit.
# Deposits from others carry interest rate in the range 10-11 % and are
repayable within 1- 3 years from respective date of deposit.
* Cash credit from banks carry interest ranging between 10.50% - 15.25%
p.a., computed on a monthly basis on the actual amount utilized, and
are repayable on demand. These are secured by pari passu charge by way
of hypothecation of stock and book debts of the Company.
** The Company has taken foreign currency buyer''s credit, which carry
interest ranging between 2.55% - 4.25% p.a and are renewable at 6
monthly rest for a maximum of three years.
# The Company has availed vendor bill discounting facility from banks
which carry interest between 12% - 14.50% p.a.., and is payable within
90 days from date of bill discounted.
## The Company has taken inter corporate loan from JKM Holdings Private
Limited, which carry interest @ 14.75% p.a. and is repayable on 15
* Shares pledged with State Bank of India, London and Punjab National
Bank (International) Limited, London, for availing loan facilities by
JKM Global Pte Limited, Singapore and Dynamatic Limited, UK, both being
* Pertains to various expenses incurred by the Company such as
professional and other ancillary charges towards acquisition of shares
of Eisenwerk Erla GmbH, Germany, through its step subsidiary, which do
not qualify for cost of investment as envisaged in Accounting Standard
(AS) 13 -''Accounting for Investments''.
2. Contingent liabilities
The details of contingent liabilities are as under:
As at As at
Particulars 31 March 2012 31 March 2011
Financial guarantee 19,423 7,570
3. Lease transactions
a) The Company is obligated under cancellable operating leases for
office, residential facilities and vehicles. Lease rental expense under
cancellable operating leases during the year was Rs.237 lacs (previous
year Rs.190 lacs).
b) The Company is obligated under non-cancellable operating leases for
plant & machinery.
Lease rental expense under non-cancellable operating leases during the
year was Rs.53 lacs (previous year Rs. Nil).
1. Closing stock is after adjustment for shortage / excess, write-off,
2. The individual item of these are less than 10% of turnover.
3. Figures in brackets relate to previous year.
4. Turnover is gross of excise duty.
Warranty provision is utilised to make good the amount spent on spares,
labour, and all other related expenses on the event of failure of
automotive products. All the amounts are expected to be utilised in the
ensuing year. Outflows are expected to maintain the same trend as that
of past years. No amount is expected as a reimbursement towards this
4. Segment information
Information about Primary Business Segments:
The business segment has been considered as the primary segment. The
Company is organized into five main business segments, namely:-
- Hydraulic and Precision Engineering (HPE) - comprising hydraulic
pumps, hand pumps, lift assemblies, valves and power packs
- Aluminium Castings (AC) - comprising castings for automotive
- Automotive Components (AUC) - comprising case front, water pumps,
intake manifolds and exhaust manifold
- Aerospace (ASP) - comprising airframe structures, precision
aerospace and components
- Wind farm (WF) - generation of power through wind energy
Segment revenue, assets and liabilities have been accounted for on the
basis of their relationship to the operating activities of the segment
and amounts allocated on a reasonable basis.
5. Derivative instruments
As of March 31, 2012 the Company has recognized losses of Rs 1,600 lacs
(2011: 275 lacs) relating to derivative instruments (comprising of
foreign currency forward contracts) that are designated as effective
cash flow hedges in the shareholders'' fund.
6. Dues to Micro, Small and Medium Enterprises
According to the information available with the Company, there are no
dues payable to Micro, Small and Medium Enterprises as defined under
the The Micro, Small and Medium Enterprises Development Act, 2006.
The Ministry of Micro, Small and Medium Enterprises has issued an
Office Memorandum dated August 26, 2008 which recommends that the Micro
and Small Enterprises should mention in their correspondence with its
customers the Entrepreneur''s Memorandum Number as allocated after
filling of the Memorandum. Further there are no dues payable to small
scale industries (previous year: Rs.Nil).
7. These financial statements have been prepared on a going concern
basis considering support from its bankers in the future at existing
level, although there has been breach of few covenants of some loans
for which, the management has initiated the process with banks for
8. The Board of Directors in their meeting dated 07 May 2011 had
decided to demerge the Automotive Division of the Company into JKM
Erla Automotive Limited (JEAL) (a wholly owned subsidiary of the
Company) w.e.f. 01 April 2011 and had received No Objection Certificate
from Bombay Stock Exchange and National Stock Exchange Limited.
Taking into consideration the tight timelines available for integration
of multiple corporate structures within the automotive business, as
well as the financial / tax implications, the Board of Directors
decided to withdraw the Scheme of demerger in their meeting dated 13
February 2012. It is proposed to evaluate an appropriate scheme during
the following year.
9. Management fee represents the cost with an agreed markup for
rendering executive management, finance accounting, human resources
services, legal and other miscellaneous services to its step down